Mark Kingdon's Thesis on Boeing & Aegerion Pharma: Invest For Kids Chicago ~ market folly

Wednesday, October 30, 2013

Mark Kingdon's Thesis on Boeing & Aegerion Pharma: Invest For Kids Chicago

Next up in our notes from Invest For Kids Chicago 2013 is Mark Kingdon of Kingdon Asset Management.   He pitched two ideas: Aegerion Pharma (AEGR) and Boeing (BA).

Mark Kingdon's Presentation at Invest For Kids Chicago

•    $1.6 million dollars 30 years ago; 17% CAGR 30 years
•    Generally positive view on global economy and equities
•    Increasing auto and housing outlook

•    Special situations:

•    Idea #1: Aegerion Pharma (AEGR)
•    Drug is Juxtapid
•    Orphan drug for HOHF (ultra high cholesterol)
•    Original thought was 300 patients in US and 900 worldwide
•    Actually though TAM of 15,000 patients or more (no pediatric assumed)
•    $295,000 per year per patient leads to $25 EPS
•    Sell side is now upping patient forecast to 15,000
•    Upcoming testing in children, Japan is growing

•    Idea #2: Boeing (BA): thinks it's undervalued
•    5 years late and well over budget
•    First major plans designed from ground up since 1960’s
•    Terrific customer experience and better for carriers
•    787 is very economical to operate
•    (no rivets rather using special glue)
•    Boeing CEO – payback could be as low as two years.
•    Used to be 5% payback on a plane and now expected return is 30%
•    Airline industry is facing rising demand
•    8 year backlog for planes
•    2015 is mid-cycle
•    12 FCF (low end of 2015) x 14 multiple = 156 stock
•    Boeing has promised to return 80% of FCF to shareholders
•    Multiple should rise, backlog is strong

Check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

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